Goldman Sachs Rules The World? Have You Looked At Their Stock Price Lately??

Independent trader and professional speaker (according to the bio page on his web site) Alessio Rastani caused quite a stir this morning when he went on BBC and said the following:

".... the market would crash as it was now ruled by fear and that all the big players in the field know that the market was toast.

This is not a time right now for wishful thinking that governments are going to sort things out. The governments don't rule the world, Goldman Sachs rules the world."

Guess working for Goldman Sachs (GS) is probably every trader's dream gig. And Rastani does not seem to have any GS association (our Google query did not turn up much about the man at all). So that probably explains at least in part his apparent blind idolization of Goldman Sachs.

Since he is supposed to be a trader, I'm not sure if he's looked at GS stock price lately. Quite simply, if Goldman rules the world where governments around the world fail, then GS stock price should not look this ugly -- down almost 50% -- in the past 24 months:

Chart Source: Yahoo Finance

In the same BBC interview, Rastani also said,

"Personally, I've been dreaming of this moment for three years. I go to bed every night and I dream of another recession."

Here are some of our thoughts on that:

He needs to get out more as there are many other dreams and goals to be had in life, and

Be careful what you wish for, because you might get it.

The last financial crisis we had in 2008 brought all the Wall Street big banks, including Rastani's idol and God's Worker--Goldman Sachs, to the brink of total destruction (see the chart below with GS stock price dip in 2008) if not for the Fed and the bailout funded by the American taxpayers money. .

Chart Source: Yahoo Finance

So no, the odds are extremely good that Goldman will NOT rule the world should there be another financial crisis and crash, and U.S. taxpayers could really call it 'God's Work' if GS and other Wall Street banks would not require yet another bailout.

As for Rastani's advise to move money into treasuries and dollar, it is a little late for that as treasuries and US dollar have become overbought, partly from traders front running theFed's Operation Twist. That means right now is unlikely a good time to jump into that trade.

On the other hand, with his the-end-of-world-crash prediction, Rastani seems to imply shorting the market would "make a lot of money from this". However, the markets are already off roughly 25% off their highs, then amid earnings momentum in the tech sector (e.g. Apple, Amazon), and that 2012 is an election year where Washington would throw everything including the kitchen sink into the economy, we are not sure shorts would necessarily come out ahead.

The moral of the story is that it looks like talking gloom, doom and "market crash" on TV is the surest way to get the 4-minute fame and get quoted across mainstream media regardless of the person's credentials and/or if the statement even makes sense.

Last we checked, Google search on "Alessio Rastani" turned up 5,280 results in 0.08 seconds, and one related post at Zero Hedge has gotten over 77,000 hits with 666 comments in less than 12 hours.

I despise you EconMatters. Figuring that Rastani idolizes GS because he mentions them just to bolster the argument is ad hominem. Check out Bruce's piece posted yesterday comparing traders to psychopaths for some reflection. Or, just go fuck yourself.

Econ-Does-Not-Matters. Do these guys and gals work for Goldman Sucks? Have they heard of Henry "Hank" Paulson, Jr.? How about Robert Rubin? Let us quote Matt Taibbi in his article titled, "How Goldman Sucks Took Over the American Economy":

By now, most of us know the major players. As George Bush’s last Treasury secretary, former Goldman CEO Henry Paulson was the architect of the bailout, a suspiciously self-serving plan to funnel trillions of Your Dollars to a handful of his old friends on Wall Street. Robert Rubin, Bill Clinton’s former Treasury secretary, spent 26 years at Goldman before becoming chairman of Citi-group – which in turn got a $300 billion taxpayer bailout from Paulson. There’s John Thain, the asshole chief of Merrill Lynch who bought an $87,000 area rug for his office as his company was imploding; a former GoIdman banker, Thain enjoyed a multibillion-dollar handout from Paulson, who used billions in taxpayer funds to help Bank of America rescue Thain’s sorry company. And Robert Steel, the former Goldmanite head of Wachovia, scored himself and his fellow executives $225 million in golden-parachute payments as his bank was self-destructing. There’s Joshua Bolten, Bush’s chief of staff during the bailout, and Mark Patterson, the current Treasury chief of staff, who was a Goldman lobbyist just a year ago, and Ed Liddy, the former Goldman director whom Paulson put in charge of bailed-out insurance giant AIG, which forked over $13 billion to Goldman after Liddy came on board. The heads of the Canadian and Italian national banks are Goldman alums, as is the head of the World Bank, the head of the New York Stock Exchange. the last two heads of the Federal Reserve Bank of New York – which, incidentally, is now in charge of overseeing Goldman – not to mention …

Thanks for posting this and I hope just as a matter of course, you will do so every two weeks, to keep the NAMES of this front organization public, if only for consumption here, but with great hope it goes viral.

Rastani described the problem correctly: we are headed for a crash and GS and the rest of the banking cartel rule the world. To assume that this would be reflected in their stock price is stupid. Rastani missed the mark on the solution. The guy is a paper-based trader, so treasuries and the USD are the best he can come up with for safe havens. Treasuries and the USD will ultimately get smashed too. Physical PMs, foodstuffs, water, guns, ammo and teaming up with like-minded people are the real safe havens.

you could see that he was thinking and proably thought that there was a chance that people would take his advise. so he played itt safe, as he knows that if a load of sheeple start shorting the market they will get taken to the cleaners

Now, let me see.... Here we have a young aspiring professional (in the 80's we used to call them "yap's" or "yuppies"), working in the financial industry, who acctually admits that he's trying to do the best job he can (whitch happens to be making money) in order to survive the economic downturn, pretty much like anyone else at the moment...

The EconMatters article is one of the more interesting misreadings of Rastani's remarks; its author seems terrified to the point of suffering from a certain near-hysterical blindness....-- I would go so far as to say that the EconMatters article is far more obliquely instructive and interesting than Rastani's comments in themselves, which, after all, remain as little more than common sense....--

Didn't Vampire Squid Goldman Sachs make money selling "shitty deals" to their clients? Why yes, yes they did! Anyone who does business with GS or buys their stock deserves the "shitty deal" they get. Everyone in the industry knows GS is the 600 lbs gorilla who will screw their own mothers no matter what the law may be... for a few pennies more of profit.

GS screwed the European Union via helping Greece commit massive accounting fraud. How many more scams and accounting fraud schemes has Goldman Sachs committed that we do not know about (yet)?

Also, GS lied that it did not need money/loans from the US Government, then months later it comes out that GS indeed needed funds desperately to stay in business (note i said stay in business, i did not say stay solvent... there is a big difference).

I am sure the largest holder of Goldman credit default swaps will be Goldman, when they decide to implode the company and take it private again. They will be short out the wazoo as well, with a mountain of $5 put options bought from Citigov to boot.

Certainly risk-off is near-term crowded, and the Asian session is showing some vigor tonight. However the medium term for the US looks like a neutered Fed and a highly pro-cyclical downturn in government spending at the local, state, and federal levels. Let the dead cat bounce and then do what he says, seems sensible.